Earlier in May, the South Korean automaker Hyundai had announced it will build a $5.4 billion EV plant in Georgia, US. The automaker had initially planned to start construction in January 2023 and the commercial roll out from the production line was expected to begin in the first half of 2025. But now as per sources, Hyundai might start the construction ahead of the timeline in 2022 itself so that it does not loses out on EV tax credit due to the new climate bill.
New Climate Bill Passed by Biden Administration
President Biden had signed a new climate bill for EVs last week that only gives tax credits to EVs that are assembled in the U.S and the materials are also sourced domestically. This new law passed by the Biden administration makes nearly 70% of the EV models ineligible for the tax credits of $7,500 for new EVs and $4,500 for used ones.
The climate bill is a big blow for the foreign automakers and has forced some serious changes in their strategies. The electric vehicle makers will now have to either move their operations to the US to build EVs or they might see some fall in the sales volumes. However this will boast the US economy.
Hyundai Motor’s Plans and Projections for U.S Market
Hyundai Motor currently manufactures all of its EVs in South Korea and then export them to the US, this new law could offset its plan for the US markets. It had started to cement its place in the US market; it is now the second biggest seller of EVs in the U.S. and has some exciting launches lined up as well. The automaker aims to roll out 11 new EV models & sell 840,000 units in the US market by 2030 and even the EV plant is projected to produce around 300,000 cars annually.
Hyundai Motor’s Georgia EV Plant Construction in 2022
Hyundai is certainly posing a greater threat to Tesla as compared to Ford, Volkswagen or GM and in order to retain the competitive advantage in terms of pricing, Hyundai will now have to rework on its plan of action. Hyundai could begin building the plant later in 2022 that would be manufacturing both EVs and batteries and start producing EVs in the second half of 2024. Although we are still waiting for an official confirmation from Hyundai but it makes sense to believe the sources.